Manufacturers are increasingly embracing eCommerce to reach new markets, streamline operations, and meet growing customer expectations for convenience. While this transition to online selling presents immense opportunities, it also comes with its fair share of challenges. Navigating these challenges effectively is critical for manufacturers seeking long-term success in the digital marketplace. With that in mind, we break down the top five challenges manufacturers face when selling online and offer insights on how to address them.
Challenge #1: Channel Conflict
One of the most significant hurdles manufacturers encounter in eCommerce is channel conflict. Selling directly to consumers (D2C) online often creates tension with traditional distributors, retailers, or partners. These intermediaries may view a manufacturer’s eCommerce platform as competition, potentially jeopardizing existing relationships.
Why It Matters:
Channel partners play a crucial role in the distribution network. Losing their trust or business can lead to reduced market reach and revenue.
Solution:
To mitigate channel conflict, manufacturers can adopt a hybrid approach, where online platforms complement rather than compete with traditional channels. For instance, offering exclusive products online, setting minimum advertised pricing (MAP) policies, or using online platforms to drive foot traffic to retail partners can strike a balance. Transparent communication about the strategic intent of eCommerce operations is also essential.
Read More: Horizontal & Vertical Channel Conflict: Examples & Tips to Resolve
Challenge #2: Systems Integration
For manufacturers with legacy systems, integrating eCommerce platforms with existing Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and supply chain systems can be a daunting task. Without seamless integration, manufacturers risk inefficiencies, errors, and customer dissatisfaction due to data silos and manual processes.
Why It Matters:
Disconnected systems can lead to inaccurate inventory data, delayed order processing, and misaligned customer information—damaging the customer experience and operational efficiency.
Solution:
Manufacturers should prioritize choosing eCommerce platforms that support robust integrations or use middleware to connect disparate systems. Collaborating with experienced IT consultants or technology partners can simplify the integration process and ensure that all systems communicate effectively. Investing in scalable, cloud-based solutions can also future-proof operations against evolving technological demands.
Learn More: The Complete Guide to Magento ERP Integration
Challenge #3: Marketing Efforts
Many manufacturers excel in product development and production but struggle with the marketing aspects of eCommerce. Unlike traditional B2B environments where relationships drive sales, eCommerce requires manufacturers to adopt digital marketing strategies to attract and convert online buyers.
Why It Matters:
A lack of marketing expertise can lead to low website traffic, poor conversion rates, and an inability to compete with more digitally savvy competitors.
Solution:
Manufacturers must embrace digital marketing tools and techniques, including search engine optimization (SEO), pay-per-click (PPC) advertising, social media marketing, and email campaigns. Developing a content strategy that highlights the unique value proposition of products can also help attract and engage customers. Partnering with marketing agencies or hiring in-house digital marketing experts may be necessary for sustained success.
Challenge #4: Internal Resources
Transitioning to eCommerce often requires manufacturers to rethink their resource allocation. Many organizations lack the dedicated personnel, skills, or time to manage an online store effectively. Balancing the demands of eCommerce with other core business functions can stretch existing teams thin.
Why It Matters:
Without adequate resources, eCommerce initiatives risk underperformance, negatively impacting revenue and brand reputation.
Solution:
Manufacturers should assess their current resource capacity and determine whether they need to upskill existing employees or hire dedicated eCommerce professionals. Outsourcing certain functions, such as website management or customer service, can also alleviate resource constraints. Establishing clear processes and assigning ownership of eCommerce responsibilities ensures accountability and efficiency.
Challenge #5: Integrating Traditional Sales Operations
For manufacturers accustomed to traditional sales methods, integrating eCommerce into existing operations can create friction. Sales teams may view online sales as a threat to their commissions, while operational workflows may not be designed to accommodate eCommerce-specific requirements like smaller order sizes or direct-to-consumer shipping.
Why It Matters:
Failure to align traditional and eCommerce operations can lead to internal resistance, inefficiencies, and missed opportunities.
Solution:
Manufacturers should take a holistic approach to integration. Providing sales teams with incentives for eCommerce success—such as commissions on online referrals—can foster collaboration rather than competition. Streamlining workflows and investing in tools like warehouse management systems (WMS) or automated shipping solutions can ensure operations are equipped to handle the demands of eCommerce. Open communication and training sessions can further ease the transition.
Use eCommerce to Take Your Business Farther
Selling online offers manufacturers opportunities to expand their reach and grow revenue, but it’s not without its challenges. By proactively addressing channel conflict, integrating systems, enhancing marketing efforts, allocating resources strategically, and aligning traditional sales operations with eCommerce goals, manufacturers can navigate these obstacles effectively. Success in the digital marketplace requires a commitment to adaptability, innovation, and continuous improvement.
Next Steps: Tips for Increasing Mobile Conversions
FAQs: eCommerce for Manufacturing
How can manufacturers address channel conflict without alienating their distributors?
Manufacturers can adopt strategies like exclusive online offerings, enforcing MAP policies, and using their eCommerce platforms to complement rather than compete with distributors. Transparent communication and collaboration are key to maintaining strong relationships.
What is the most critical factor for successful systems integration in eCommerce?
The most critical factor is choosing an eCommerce platform that supports seamless integration with existing ERP, CRM, and supply chain systems. Partnering with IT experts and investing in scalable, cloud-based solutions can also ensure long-term success.
What marketing channels are most effective for manufacturers entering eCommerce?
Effective channels include SEO to improve visibility, PPC for targeted advertising, social media for brand engagement, and email marketing for nurturing customer relationships. Leveraging analytics to measure performance and optimize campaigns is also essential.
